Landlord and Tenant Acts — Question

– in the House of Lords at 2:45 pm on 29th July 2014.

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Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative 2:45 pm, 29th July 2014

To ask Her Majesty’s Government what plans they have to amend the Landlord and Tenant Acts to require landlords actively to notify tenants of changes to service charges, insurance premiums and insurance excesses.

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

My Lords, information about service charges and insurance is already available to tenants should they wish to exercise their rights to obtain it. The codes of practice approved by the Secretary of State also require that tenants are consulted about service charge budgets for the coming year, and the redress schemes coming into force this year must have regard to the breaches of the code. The Government have no current plans to amend landlord and tenant legislation.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

I thank the Minister for that reply. I declare a direct, personal interest in respect of my own insurance for the block of flats that I am in, which has always had an excess charge of £250. When I had cause to make a claim recently, I was told that it had gone up to £2,500, which is a tenfold increase, and I was also told that that had happened three years before, although no one in the block had received any word of it. How many other people does the Minister think might be in similar positions, with important decisions being made without tenants or leaseholders having any idea that this is going on?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

My Lords, first, I draw attention to my leasehold interests in the register. In terms of information being shared with leaseholders, the Government agree that leaseholders should be made aware of any changes to service charge costs and the costs of insurance that they are required to contribute to. Moreover, they should be consulted about qualifying works and long-term agreements that exist.

My noble friend points to the issue of transparency, which of course is key. The statutory consultation requirements in Section 20 require that landlords disclose any connections when entering into long-term agreements over 12 months.

Finally, it is important for all leaseholders to make sure that their existing rights are protected. They can get free initial advice from the Leasehold Advisory Service.

Photo of Lord Richard Lord Richard Labour

With great respect to the Minister, the question is not whether tenants should have this information if they go and look for it—it is whether landlords should be obliged to tell them. Will the Minister kindly deal with that point, which seems to be the essential one? In these circumstances, should not landlords have an obligation to inform tenants of circumstances in which tenants will be very adversely affected as a result of changes of which they know nothing?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The important thing in this area is that a balance is struck between leaseholders’ rights about their homes, and existing legislation provides protection in this respect, including protection from freeholders about proceedings to forfeit the lease due to alleged breaches. The Government continue to welcome suggestions on how residential leasehold can be improved. Indeed, we held a round table last year and I am delighted to inform the House my honourable friend Brandon Lewis and I, together, I hope, with my noble friend Lord Faulks, will host a leasehold round table in the autumn of this year.

Photo of Lord Shipley Lord Shipley Liberal Democrat

May I widen the issue a little? A recent report by Professor Michael Ball of Henley Business School at the University of Reading suggested that too much resource goes into regulating good landlords and too little in tackling bad landlords. Might the Minister look at this issue and, in particular, see if the balance between the two is right?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

My noble friend makes a very valid point. There are landlords who are good and others who, unfortunately, are not. Good practice needs to be shared. If there are individual cases that need to be followed up and good practice that needs to be shared, I would of course welcome input from my noble friend in that regard.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Innovation and Skills), Opposition Whip (Lords), Shadow Spokesperson (Cabinet Office)

The Minister referred to the forthcoming right of every leaseholder, tenant and, indeed, landlord to take complaints—thanks, mostly, to this House—to a redress scheme. However, that will work only if people know about it and know which redress scheme to go to. Could the Minister outline what plans the Government have to notify tenants, landlords and leaseholders about this new right?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The noble Baroness is of course correct. We are looking to do that and to help leaseholders to feel more secure. On the right to be consulted about legal and service challenges, to extend a lease or buy the freehold, to take over management—subject to certain criteria—or seek an appointment from a tribunal and protection for service charges so that moneys are protected from creditors, we are working with practitioners in the field to ensure that such information is communicated effectively. We have talked about good landlords and bad landlords. It is important that good practice and good landlord practice is shared, and we encourage landlords to share information on the rights of leaseholders with their own leaseholders.

Photo of Lord Swinfen Lord Swinfen Conservative

Many tenants have to pay a substantial annual maintenance charge. I understand that in many instances no maintenance is actually carried out. Will the Government make sure that landlords carry out proper accounting for the tenants?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

If there is a specific case, I have not seen it. If my noble friend has the details, perhaps he will share them with me. The important thing here—and I have already alluded to this— is that if any contracts are entered into that are 12 months or greater and which include maintenance fees, or any changes are brought about to those, landlords are not just encouraged but required to share that information with their leaseholders.

Photo of Lord Anderson of Swansea Lord Anderson of Swansea Labour

The noble Baroness, Lady Gardner, has been an assiduous champion of tenants over many years. Will the Minister give an undertaking to invite her to his round table?

Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Parliamentary Under-Secretary (Department for Communities and Local Government)

The noble Lord is right—and not just to my round table, but to any dinner table as well.